Dataquest's Second Quarter Results Show LAN Switches Revenue Surpasses Routers and Shared Media Hubs
San Jose, Calif., August 20, 1998 -- The worldwide networking equipment industry was drivenby the LAN switch market in the second quarter of 1998, as revenue surpassed$2.1 billion, an increase of 78 percent over the second quarter of 1997,according to preliminary statistics from Dataquest Inc., a unit of GartnerGroup Inc. (NASDAQ:GART).
LAN switches, routers, and shared media hubs, reached$4.1 billion, up 27.8 percent from the second quarter of 1997.
"The switch market has been driven by the demandfor more efficient use of bandwidth," said John Armstrong, director andprincipal analyst for Dataquest's Networking Worldwide program. "As anearly entrant into the market, Cisco Systems has benefited the most fromthe rapid adoption of this technology."
Cisco continued to lead the LAN switch market, whichgrew 168 percent in the second quarter, and Cisco's own share of this marketsurpassed 40 percent (see Table 1). All segments of the LAN switch marketdid well, especially the Fast Ethernet segment, which surpassed the $1billion revenue mark during the quarter.
Table 1
Preliminary Worldwide LAN Switches Revenue Estimates for Second
Quarter 1998
(Millions of U.S. Dollars)
Q2/98 Q2/98 Market Q2/97 Q2/97 Market GrowthCompany Revenue Share (%) Revenue Share (%) (%)Cisco 857 40.6 320 27.0 167.73Com 323 15.3 247 20.8 31.2Bay Networks 238 11.3 145 12.2 63.8Cabletron Systems 188 8.9 198 16.7 -4.6Others 503 23.9 277 23.3 81.6Total 2,109 100.0 1,187 100.0 77.6Source: Dataquest (August 1998)
Cisco was the only top-tier vendor in the routermarket to increase its market share in the second quarter of 1998 (seeTable 2). Dataquest analysts said all segments in the router industry didwell. "The midrange and high-end router market segments experienced growth,providing evidence that enterprise networking business remains a stronggrowth engine in the router market," said Armstrong.
Table 2
Preliminary Worldwide Router Revenue Estimates for Second
Quarter 1998
(Millions of U.S. Dollars)
Q2/98 Q2/98 Market Q2/97 Q2/97 Market Growth Company Revenue Share (%) Revenue Share (%) (%)Cisco 1,007 71.4 793 69.3 27.0Bay Networks 152 10.8 127 11.1 19.3IBM 35 2.5 35 3.1 0.43Com 31 2.2 32 2.8 -4.4Others 186 13.2 158 13.8 17.7Total 1,411 100.0 1,145 100.0 23.2
Note: Total percentages may not add to 100 percent due to rounding.Source:
Dataquest (August 1998)
The worldwide shared media hubs market suffered fromcontinued price erosion. Shared media hub shipments increased 13.8 percent,but revenue declined 33.5 percent. While the top-tier vendors all suffereda decline in revenue, 3Com continued to hold the No. 1 position with 23.5percent market share. Bay Networks was the No. 2 vendor with 21.3 percentmarket share, followed by Cabletron Systems, which posted 16.1 percentmarket share.
Additional market statistics are available in theDataquest Alert titled "Router, LAN Switch, and Shared Media Hub MarketPerformance for Second Quarter 1998." This report provides preliminarymarket statistics including market size by product category, market sharefor major segments.
This report is produced by Dataquest's NetworkingWorldwide program. This program focuses on the developing LAN and WAN technologiesand products that are driving the growth of the networking industry. Additionalinformation on this program can be found on Dataquest's Web site at http://www.gartner.com/dq/static/about/programs/netw-ww.html.
To purchase these reports, or to subscribe to Dataquest'sNetworking Worldwide program, please call 800/419-DATA, or 408/468-8009.More information about Dataquest's programs, descriptions of recent researchreports, and full text of press releases can be found on the Internet athttp://www.dataquest.com.
GartnerGroup's Dataquest is the recognized leaderin providing the high-technology and financial communities with marketintelligence for the semiconductor, computer systems and peripherals, communications,document management, software, and services sectors of the global informationtechnology industry.
As the world's leading authority on IT, GartnerGroupprovides clients with a wide range of products and services in the areasof IT advisory services, measurement, research, decision support, analysis,and consulting. Founded in 1979, with headquarters in Stamford, Conn.,GartnerGroup is at the center of a global community with more than 11,000client organizations served by analysts in 80 locations worldwide. Additionalinformation about the company is available on the Internet at http://www.gartner.com.
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